Debt Eaters

Student activists say rising loan rates ARE a distraction from the real problem of unaffordable college degrees

Alyssia Osorio, a City College student with New York Students Rising, was among 20 students who attended a Sallie Mae shareholders meeting in May, asking for more transparency and disclosure of its lobbying efforts. That won them a meeting with the company's new CEO.

On June 25, a small group of student borrowers and recent graduates met with that CEO, Jack Remondi, to demand that Sallie Mae not only make public its membership in any lobbying and tax-exempt organizations and quit ALEC, but that it also provide immediate relief for struggling borrowers by reducing principal debt, refinance interest rates for struggling borrowers, share default losses by writing off principal, and publish information explaining how loans are modified and who is eligible.

Afterward, Sallie Mae issued a brief statement that it was pleased to "share how we help students graduate with less debt and how we modify loans to reduce interest rates for those who experience difficulty in repayment."

Hicks says students' requests were all met with a no. Still, he insists, the student movement around debt issues is gaining ground.

"We went from getting arrested outside the building to the Department of Education secretary meeting with us," says Hicks. "We've now gone from demanding the meeting with Sallie Mae to having the meeting."

Student loan activists' demands go far beyond lower interest rates: They'd like to see bankruptcy protection for all student borrowers, easier refinancing of student loans, and increased Pell grant funding and other need-based aid. Students in the Roosevelt Institute Campus Network and the United States Students Association put out a report in March that also suggested simplifying the government's current income-based repayment plan, which allows graduates with low incomes to cap their loan payments at 15 percent of their discretionary income, but which has long been beset by poor publicity and a confusing application process.

But are efforts to help students repay debt merely band-aids?

New York state reform activist Bill Samuels thinks so. He says even state-level legislation, like Oregon's new "pay it forward" bill — which would make public universities free in exchange for graduates paying back 3 percent of their annual income for 25 years after graduation—doesn't go far enough. "The problem is you have to take a loan out, period," he says.

Indeed, student and faculty leaders say they've noticed divisions between private school activists, who are more likely to focus on their debt burdens, and public school activists, who are more concerned with access to education in the first place. Emma Francis-Snyder, a Brooklyn College student, says class differences made it hard to form a unified movement during Occupy Wall Street. "We could never bridge the gap between the private schools and the public schools," she says.

Jeje says differences between the approaches of public and private school students had as much to do with style as substance. "A lot of the citywide private school kids were sort of just about occupations," she says of the movement's start. But, she says, all students have now come together around efforts for affordable education for all.

Hicks agrees that the brightest glimmers of hope for solving the problem don't have to do with repaying loans, but with offsetting the overall cost of education. California voters agreed to raise income taxes for high earners and hike sales taxes to help stave off higher education cuts last year, and Massachusetts's latest budget proposal increased state funding for the University of Massachusetts in exchange for the school freezing tuition and fees.

In New York state, most efforts have centered around fully restoring recent cuts to SUNY and CUNY. New York's DREAM legislation would also have opened the state's Tuition Assistance Program to all students who meet the funding criteria, regardless of immigration status. But the bill died in the senate at the end of the legislative session in June.

"We can't keep talking about interest rates," says Hicks. "We need to look into solutions like that to put money back into higher education."

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2 comments
mikehext
mikehext

A note about the for-profit college industry. SallieMae helped them skirt the 90/10 regulation. The private loan bankruptcy code that was stripped in 2005 combined with a Katrina bill that deregulated for-profit colleges, it created the perfect storm. They were pushing private loans disguised as Federal hard because SallieMae was middleman. For every 1 dollar of private loans they tricked students into, they got 9 dollars of Federal money in Pell/Federal loans. Obamacare changed that a bit so that that SallieMae isnt the middleman, but they totally got away with what they did. They worked with the school to abuse "preferred Lender lists" The Attorney General of NY caught them doing this and they settled for 2 mill but made 118Billion.

Its so slimey.


Nowadays for-profit colleges suck up 90% of their funding via Pell/Federal loans, the other 10 % is in the form of GI BILLs pilfered from vulnerable veterans  and bogus scholarship write-offs.

rowmyboat
rowmyboat

"from occupiers to straight-laced overachievers" 

Um, occupiers, while not usually straight-laced, often are the overachievers. Way to promote an unfounded just-so-story about political activists.

 
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